Recession

A Post Western World? A Disturbing Interview With Prof. Harry Redner

The political and economic issues broadly discussed in the media usually revolve around political cycles, terrorism, foreign policy, rising debt levels, sluggish economic performance, academic underachievement, environmental problems, ageing demographics and so forth.  In our view, this all ties into a major cycle of history that has been with us for some time, and which has been gaining traction since the 1990s: the end of "Western Civilization" and the transition towards a globalized society.

"Policymakers Have Been Calling A 'Depression' A 'Recovery' For Nearly A Decade"

"I'd like to think that logic and reality will prevail; that distaste for being told how great the world is has become sufficiently revolting and obviously false to stir the world’s populace to end the imbalances. But that, again, will take time, perhaps a good deal of time; until then, whenever it hopefully is, central banks continue to operate with impunity even though the risks of their intemperance rise exponentially..."

Former Fed Governor Admits "Fed Is Not Data Dependent; It Is Propping Up Asset Markets"

"They look to me asset price dependent more than they look data dependent. When the stock market falls like it did in the beginning of this year, they say, ‘Oh, we better not do anything.’ Stock markets are now at career highs. I suspect when they meet next week they will suggest, ‘Oh, now they look like they can be somewhat more responsible.’"

Pound Plummets On Renewed Recession Fears As PMI Shows Fastest Contraction Since 2009

Sterling plummeted nearly 200 pips this morning, after rising in early trade to just shy of 1.33, when the latest July Markit flash PMI surveys suggested the UK is heading for a quick recession in the form of a 0.4% GDP contraction in the third quarter. As Markit reported, "July saw a dramatic deterioration in the economy, with business activity slumping at the fastest rate since the height of the global financial crisis in early-2009."

Frontrunning: July 22

  • Global stocks fall, UK PMIs flash Brexit recession warning (Reuters)
  • Trump's greatest hits, all in one speech (Reuters)
  • Donald Trump Accepts GOP Nomination, Promises to Fix America (WSJ)
  • Trump's America Grows More Ominous Over 13-Month Run (BBG)
  • Hillary Clinton: unwitting star of the Republican convention (FT)
  • Clinton faces pressure to pick VP who is tough on trade, Wall Street (Reuters)

US Futures Rebound Despite Global Stock Weakness As USDJPY Ramps HIgher

After breaking a multi-year stretch of 9 daily record highs in the Dow Jones, overnight global markets saw some early weakness with Asian stocks retreating after BOJ chief Kuroda dashed hopes for so-called helicopter money, triggering yen’s steepest rally in a month and pulling the Nikkei lower by 1.1%. This however did not last long, and around the European open the traditional ramp in the USDJPY helped European equities shrug off early downside, while US equity futures have already recovered half of yesterday's losses.

The 'Fed Model' For Stocks Is Just "Another 90s Gimmick To Justify The Unjustifiable"

Stocks trading on very shaky ground at already high multiples (and greater uncertainty that it will all be corrected naturally by the any-day-now thriving economy), means efforts to justify increasingly outlying earnings multiples are over-reaching... "There is just nothing to suggest interest rates are related to PE’s or EP’s, and thus the “Fed model” was but another 1990’s gimmick to justify the unjustifiable."

Energy Giant Schlumberger Fires Another 8,000 As "Market Conditions Worsened" In Q2

"As a result of the weakness in activity that will persist through 2016 as expected, we have made another significant adjustment to our cost and resource base, including the release of more than 16,000 employees during the first half of 2016 and a further streamlining of our overhead, infrastructure, and asset base."

Mattress Money & Need-For-Yield: "We Saw This In 2007"

“Cash On The Sidelines.” is the age old excuse why the current “bull market” rally is set to continue into the indefinite future. The ongoing belief is that at any moment investors are suddenly going to empty bank accounts and pour it into the markets. However, the reality is if they haven’t done it by now after 3-consecutive rounds of Q.E. in the U.S., a 200% advance in the markets, and now global Q.E., exactly what will that catalyst be? However, Clifford Asness summed up the problem with this myth the best and is worth repeating...

Wall Street's Wishful Thinking - Debunking The "Abundance Of Strong Data" Meme

Having flirted with recession and escaped that fate, the mainstream assumes that 'it' is all over and that prior expectations should only resume. This binary arrangement has clearly colored recent analysis, and as such it has led to really unhinged commentary...but "abundance of strong U.S. economic data" is pushing very close to wishful blindness.

Amazon To Issue Student Loans To New "Prime" Shoppers

In Amazon's latest attempt to entice shoppers into its premium Prime program, Wells Fargo will cut half a percentage point from its interest rate on student loans to Amazon customers who pay for a "Prime Student" subscription, which provides the traditional Prime benefits such as free two-day shipping and access to movies, television shows and photo storage.

What To Expect In Today's ECB Announcement: "Time To Send Another Dovish Signal"

Following the previously noted fireworks from Kuroda, who in a BBC interview said that there is "no possibility" of helicopter money (which however the WSJ quickly added was based on an interview conducted in mid-June which supposedly means there is possibility now) In under an hour the market will turn its attention to the ECB's latest statement, where as SocGen's Anatoli Annenkov writes, it is "time to send another dovish signal."

Yen Soars, Stocks Slide After Kuroda Says "No Need Or Possibility For Helicopter Money"

In a surprising rejection of Ben Bernanke, BOJ governor Haruhiko Kuroda said that there will be no helicopter money in Japan, amid increasing speculation over monetary and fiscal policy in the world’s third-largest economy. Given the current institutional setting, there is "no need and no possibility for helicopter money," Kuroda said in a BBC Radio 4 program that was broadcast Thursday. “At this moment, the Bank of Japan has three options with quantitative and qualitative easing with negative interest rates."

Becoming Japan: "The Threat Of A Global Recession Is Growing"

As we laid out over a year ago,, this simple combination of productivity and demographic trends reveals that U.S. trend GDP growth is converging toward 1%. This is reminiscent of Japan during its "lost decades." Expanding this analysis to the rest of the G7, we find that every economy is effectively becoming Japan, and the sharpest slowdowns are happening outside North America.